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How A Lack Of Farm Data Could Hurt Farmers

04/11/2017

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Imagine you’re a farmer and it’s time to decide what to plant. You need information on supply, demand, prices, outlook — information from the U.S. Department of Agriculture, university extension services, even economists at the Federal Reserve.

All of those agencies depend on data pulled from surveys sent out to farmers. The answers are often compiled by the U.S. Department of Agriculture’s National Agricultural Statistics Service, which makes data available free. Fewer farmers are responding to surveys, the Agriculture Department says, which could throw the accuracy of the data off, leaving farmers to fend for themselves when making choices for their businesses.

Missouri row crop farmer Adam Gatson recently drove more than an hour to attend an economic outlook conference put on by the University of Missouri’s’ Food and Agricultural Policy Research Institute. He was interested in learning what the current trends are in global demand and where he should sell his corn and soybeans.

“I use it for making marketing plans for the future year,” Gatson says, “trying to predict what highs are possible and where you’re trying to predict where you’re going to market our crops.”

Conferences like the one Gatson attended in Columbia, Missouri, attract more than just farmers: bankers, commodity group leaders, and food and beverage company representatives all hedge their bets based on these projections. Congress develops farm policy partially based on this information.

The man behind many of projection calculations, Pat Westoff, director of the Food and Agricultural Research Policy Institute, says if farmers stopped responding, it could create a huge hole in the research.

“We very much rely on getting good information, what production really was, what prices really are,” Westoff says. “Those sorts of things are critical to our work, critical to our work with Congress, critical to the farm programs we have today.”

The farm surveys ask questions like, How many acres of soybeans did you plant? What prices did your bushels of wheat fetch? To whom did you sell your pork? Economists round up the responses and make the projections.

Farmer Adam Gatson said he completes his surveys because he knows how valuable the information is, but they can be burdensome.

“It seems like they get longer and more detailed and more tedious every year,” Gatson says. “At some point it begins to get really frustrating about how much time it takes to fill them out.”

That is the problem.

“We’ve seen the percentage of producers that were responding to the survey start to fall over the last maybe seven years or so,” says USDA Chief Economist Rob Johansson.

In the early 1990s, response rates hit 85 percent, Johansson says. Recently, response rates have dropped lower than 60 percent in some cases and are still trending downward at a fast pace.

Johansson says he fears a dip in the quality and reliability of the data, which can have all sorts of impacts. Take, for instance, the Agricultural Risk Coverage-County program (ARC-CO), a kind of crop insurance that depends on county-level data. The payouts depend on what farmers in a given county report, which is some of the most challenging information to analyze, and the answer can mean thousands of dollars to farmers and billions to the federal budget. Johansson says response rates for the information needed to calculate those payments are trending downward.

The numbers also drive other federal farm programs.

“Programs that can help with new beginning farmers, for example,” Johansson says. “Or on just having a better idea of what the mix is out there in terms of organic versus conventional.”

There is one caveat about the decline in responses: part of the problem may stem from the rise in farm consolidation throughout the industry, which means fewer actual farmers are available to respond to a survey. But Keith Coble, an agricultural economist at Mississippi State University, says that consolidation does not fully account for the large recent drop-off in response rates.

The decline in response rates could hit smaller farms more acutely, Coble says. The Agriculture Department puts data in the public space so every farm is operating under the same information, creating a level playing field. Take away that information and smaller family farms will not be able to keep up with the larger ones, Coble says.

“Some entities that are large enough can go collect data on their own and have an advantage, for example, when they go trade in the futures market,” he says. Many smaller farms cannot afford to pay for private analyses.

The USDA is hoping to get reticent farmers back on board with surveys. Data gathering is especially key this year as the 2017 Agricultural Census kicks off – it is probably the most important and comprehensive survey with the most wide-ranging consequences developed by the federal department.

This time around, Coble says, researchers will likely use the internet more to reach out to farmers. Down the line, data gathering itself will change.

“I think one of the things that we may see with technology, with remote sensing, with big ag data, I think the day is going to come, and it is not going to happen overnight, but the day is going to come when we’re going to find ways to do some of the things differently,” he says.

The USDA is making a big push to make sure farmers not only respond to the surveys but that they understand how important this information is. The department launched a series of videos featuring dozens of farm groups and universities touting the surveys’ significance, which may prove to be important in the upcoming months.

In its initial budget, the Trump administration proposed a 21 percent cut to the Agriculture Department’s appropriation, naming the statistics wing as a place to trim funding.

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